Steve Barclay is the Conservative Parliamentary Candidate for North East Cambridgeshire and has worked for over a decade in the financial services industry, including in insurance, banking and for the city regulator. His current role involves financial crime prevention for a large bank.

Many commentators and politicians have recently called for more regulation of the financial services industry. Often these have been the same voices who previously said light touch regulation was essential for the competitiveness of the City of London.

The call for more regulation ignores just how many rules we already have. The FSA Handbook runs to over 6,000 pages. Adding an extra 500 pages after the horse has bolted is not the answer. Nor is yet another corporate governance report, which will do little to shift the culture of firms away from their focus on the short term.

Instead we should enforce existing rules to drive good behaviour. It is striking that so many of those who broke rules in recent years still remain in their job, or in similar roles with other firms.

Without individual enforcement, it will always be tempting for executives to play lip service to rules rather than put their bonus at risk. Most senior executives know plenty of colleagues who have been fired for failing to meet their target. Few know colleagues who have been subject to regulatory enforcement action. None I suspect have colleagues who have personally paid a fine to the regulator greater than a single year’s bonus. Missing the target set by their Chief Executive or institutional shareholders is still a greater threat to a career or bonus than the threat posed by the regulator.

The Financial Service Authority has plenty of scope to hold reckless executives to account, not least its highest level rules, the 11 Principles. These are a bit like the 10 Commandments, and include requiring firms and their senior executives to act with integrity, to understand and manage their risks, and to be open with the regulator. Executives in past years often understood the risks they were running, but they were not willing to be open with the regulator about them.

Those seeking new rules, both in the UK and globally, often ignore the cost of trying to mitigate against events which happen once in a lifetime. Hindsight has led some to suggest unused equity capital should have been put aside to protect against recent events. This would have burdened business with massive extra cost and made them less attractive to investors.

Instead it is the behaviour within firms which needs to be addressed. This is not just an issue for regulators. Fund managers did little to ensure long term strategies were followed. Auditors failed to identify key risks when signing off accounts. Non executive directors agreed large remuneration deals based on short term performance. All took their fees for doing so.

The behaviour of the regulator also needs to change. It should look much more closely at firms conducting banking activity which are not banks, and these may need to fall directly within their remit. Liquidity can no longer be assessed on the basis that a firm will be able to turn to others should their credit line dry up. The gap between senior executive rhetoric and the reality on the ground needs closer scrutiny – not least the practice of internal reports being sanitised. They also should address why so few of their own heads of department have ever worked in the industries they regulate, and why many leave interviewing firms to junior colleagues who provide little challenge.

As for the wider regulatory framework, a reversal of Gordon Brown’s tripartite system with a shift of regulatory oversight back to the Bank of England has its supporters, but the downside would be more regulatory upheaval. The Bank of England does need to take financial stability into account when setting interest rates, and it should have a clearer mandate to speak up on macro economic risks. However it seems optimistic to think any change of supervision will solve future mistakes, not least given the regulatory failures before 1997 under the Bank’s stewardship.

Regulation should focus on the future not the past. For example, a more radical option might be to make auditors report directly to the regulator with a dotted line to the board. This would provide better scrutiny on the ground, and remove a potential conflict of interest with those paying their fees. Appointments would be made for fixed terms.

Simply adding more rules may look like action is being taken, but it would increase costs and deter investment in the UK. It would also fail to deliver successful outcomes in firms. Enforcement against individual executives who behaved recklessly is more likely to change the culture of firms and with it to deliver a transparent and efficient market.